The United Arab Emirates and Saudi Arabia Cooperate to Develop a Comprehensive New Cryptocurrency Project

Last Modified:12 May 2020 14:44:26
The United Arab Emirates and Saudi Arabia Cooperate to Develop a Comprehensive New Cryptocurrency Project

On January 19, the United Arab Emirates and Saudi Arabia signed a cooperation agreement to develop a new cryptocurrency, Emirate News Agency reported.

According to this report, Executive Committee of the Saudi-Emirati Coordination Council, in an important meeting held in Emirate’s capital Abu Dhabi with 16 members, reached a final agreement on this project. Its objective is to develop a new and exclusive cryptocurrency to be applied in banking trades, and it is currently in developing and evaluation phase. The ultimate aim of this project is to attain a better understanding of the structural needs of Blockchain technology and its application in cross-border payments and transactions. Also, in this important and practical project, the effect of a central currency on financial policies will be investigated. Other aims of this project include protecting customers’ interest rate, establishing standards for cryptocurrency technology, and also providing the infrastructures to solve cybersecurity risks while using cryptocurrency structure.

The advent of New Cryptocurrency in the Middle East

Cointelegraph, which is among the most reputable news sources in the field of cryptocurrencies, reported in December last year, that Emirate Central Bank will cooperate with a council of financial experts from Saudi Arabia on a cross-border infrastructure for banking trades between the two countries. In the same month, another report was published from this news website according to which the United Arab Emirates intends to join the Blockchain progressive businesses in 2019, a prediction that was soon realized.

The to-be-operationalized cryptocurrency by the cooperation of these two countries requires establishing various legal and political infrastructures, which will reportedly be completed as soon as possible. The main focus of the application of the new cryptocurrency in banking trades between the two countries includes trades related to aerial industry, educating the young workforce, and establishing the practical infrastructure for cryptocurrencies. It needs to be mentioned that other Middle Eastern countries have been very eager about establishing Blockchain infrastructures in their country, and even Kuwait Central Bank collaborates with Ripple to improve inter-bank interactions and simplify this structure. Therefore, it would not be surprising to see the Middle East turn into a progressive center in the world regarding the use of cryptocurrencies in trades in the coming years. The important point is that there are rumors about the acceptance of different infrastructures based on Blockchain to become operational and inclusive during the coming years in the United Arab Emirates. Therefore, their cooperation with Saudi Arabia could be considered a trial and error for the deployment of this tremendous and vast project in Emirate.

RippleNet, a global payment network, and Ripple cryptocurrency called Ripple XPR were created in 2012. RippleNet connects to big banks and institutions and allows the transfer of money or other assets on its infrastructure. All transactions are registered in its decentralized ledger, XPR ledger.

Other Important Points in Utilizing Cryptocurrency in Cross-Border Trades

Utilizing Blockchain in cross-border trades is a good move forward, since these types of trades always received criticisms regarding slow function and being too costly, while Blockchain-based payments can completely revolutionize this structure, and allow banking trades be done with less time and transfer fee. If this structure is changed properly and receives appropriate feedback, many other countries in the world will also accept such standard for their cross-border banking trades which will cause a whole lot of change in this area. Therefore, it is not unexpected to consider Abu Dhabi the main center of cryptocurrency trades in the near future which will be working under a big project called Blockchain Island. Now, all eyes are on this big agreement between the two Arab countries to develop Blockchain infrastructures, and its positive feedback can result in a revolution in the large financial trades of the world.